IIM Business Education in India to Expand: MBA News

India’s new government has announced the proposed launch of six new IIMs (Indian Institutes of Management) in its first budget presentation. Considered to be the leading providers of business education in India and the Asia Pacific region as a whole, the IIMs would then be able to count 19 members among their ranks.

“The country needs a large number of centers of higher learning which are world class...[the] five IIMs would be set up in the States of Himachal Pradesh, Punjab, Bihar, Odisha and Maharashtra,” said finance minister, Arun Jaitely.

Of the 13 IIMs currently in existence, IIM Ahmedabad leads the way for employer reputation, ahead of IIM Bangalore and IIM Calcutta in Asia Pacific’s top 10, according to the 2013/14 QS Global 200 Business Schools Report.

However, the demand for business education in India – home to the world’s second-largest population – is so high that these 13 business schools account for only 1% of India’s available MBA or PGDM places, according to figures from accreditation body, the All India Council for Technical Education (the PGDM, or postgraduate diploma in management, is the MBA equivalent used by providers of business education in India that are not universities, including the IIMs).

IIM Ahmedabad was recently found to have world’s lowest acceptance rates at 0.25% for the academic years 2012-14 (the most selective US school, Stanford, accepted 7% of applicants in the same timeframe by way of comparison). Second-tier institutions have moved in to capitalize on increasing demand – something that has seen the total number of places available for MBA-level education in India double over the past six years.

Quality comparable to IIM Ahmedabad sought

The problem now is that those graduating from second-tier business schools are finding it much harder to secure jobs – even within their local markets – telling, given that India is in fact the world’s largest provider of MBA jobs, according to QS research. The government’s move to establish new IIMs therefore looks like an attempt to increase students’ access to top-tier business education, which is respected by employers.

“Competition in India is so intense. So many kids have outstanding grades. The application to acceptance rate probably makes [IIM-Ahmedabad] the most competitive business school in the world.” QS founder, Nunzio Quacquarelli, told Bloomberg Businessweek.

There are already those who believe that too many IIMs could negatively impact the quality of business education associated with them.

However, a projected 18% rise in places available at all 18 IIMs, once these five new additions are up and running should come as welcome news to those currently fighting to land a place at one of India’s top business schools.